Dev’t finance law seen boosting US overseas investment

US INVESTMENTS in the Philippines are expected to increase with the passage of development finance legislation in the US, a US official said.

Overseas Private Investment Corp. (OPIC) Executive Vice-President David Bohigian said Tuesday that US firms retain a ”heightened interest” in the Philippines.

“There continues to be heightened interest in the Philippines. It’s something that we’ve worked with our partners to better understand the Philippine market,” he told reporters in a teleconference late Tuesday.

“I’d expect to see more investment under the BUILD (Better Utilization of Investments Leading to Development) Act and through the Development Finance Corp. in the Philippines in the near future,” he added.

US President Donald J. Trump on Oct. 5 signed into law the BUILD Act, which strengthens the US development finance capabilities. The law also reorganizes the OPIC, a government agency which helps US businesses invest in emerging markets, into an entity called the US International Development Finance Corporation (USDFC).

Mr. Bohigian also said the law will allow the US additional flexibility in financing Asian investments, with the USDFC’s additional authority to make equity investments, raise its investment portfolio cap to $60 billion from $29 billion, and provide technical assistance to projects.

“So, (we’re) being able to really go deeper into several countries where we have foreign policy and development needs,” he said.

US Secretary of State Michael R. Pompeo has said the BUILD Act offers “a better alternative to state-directed investments” and advances Washington’s foreign policy goals.

In the Philippines, Mr. Bohigian noted that the US is studying the information technology (IT) sector.

“I’m impressed by the entrepreneurial society that they’re building there within IT and their connectivity to the world. Ensuring that countries like the Philippines have more connectivity through telecom networks, through trade relationships, through having open societies is important,” Mr. Bohigian said.

The OPIC has invested $250 million in the Philippines in five projects. One is a $2.5-million loan allowing QuantumID Technologies, Inc. to invest in an air cargo management system.

Asked to describe the US approach to development finance relative to China’s, Mr. Bohigian said the US takes care to ensure that projects are a win for the country it is helping, and that its sovereignty is not threatened. It also strives to use local labor, and protect the environment.

“The US relationships in these countries run back hundreds of years, and our relationships are built to last. And the projects that US companies and the US government undertake are not merely the lowest cost on day one for the bid, but truly meant to ensure total cost of ownership so that we can be proud of the projects and societies that we’re creating in the 21st century,” he said.

“So I think that’s how the Build Act can help play into not just the Indo-Pacific strategy but truly how we can help modernize development finance,” he added.

Mr. Bohigian said that US Vice-President Michael R. Pence is also expected to highlight the BUILD Act during his visit to Papua New Guinea next week for the Asia Pacific Economic Cooperation (APEC) summit. —